Moldova Struggles with Virtual Asset Regulation Despite Improvements in Anti-Terrorism Financing

The Republic of Moldova has made strides in preventing terrorist financing, yet continues to face significant shortcomings in its approach to virtual assets, according to a report issued by MONEYVAL, the Council of Europe’s anti-money laundering committee.

This update comes five years after an initial report highlighted Moldova’s money laundering technical deficiencies. The new report reveals that while Moldova has improved compliance with several recommendations from the Financial Action Task Force (FATF), challenges remain.

Countries are assessed based on their compliance with FATF’s 40 recommendations, which include measures to combat money laundering and ensure transparency in the beneficial ownership of legal entities. Nations can be rated as compliant, largely compliant, partially compliant, or non-compliant for each recommendation.

MONEYVAL's 2022 assessment identified multiple technical compliance deficiencies in Moldova’s approach to terrorist financing, specifically in relation to FATF recommendations 6 and 7. To address these issues, Moldova introduced new regulations that updated its implementation procedures for financial sanctions related to terrorist activity and the proliferation of weapons of mass destruction. These new rules took effect on December 1, 2023.

Despite these advances, MONEYVAL found that Moldova had made "only limited progress" in addressing deficiencies related to FATF recommendation 15, which pertains to virtual assets and virtual asset service providers. The report noted that Moldova “provided no information” to assess its compliance with enhanced oversight rules for these providers. Consequently, Moldova was re-rated as partially compliant for recommendation 15.

MONEYVAL remarked, “The country has not achieved the expectation of addressing most of the technical compliance deficiencies within three years after the adoption of the mutual evaluation report.” The committee highlighted that Moldova had received a mutual evaluation report in July 2019, which detailed its vulnerabilities to money laundering and outlined necessary remedial steps.

MONEYVAL has urged Moldovan authorities to rectify the majority of these technical issues by June 2025. Currently, out of the 40 FATF recommendations, Moldova is rated as compliant for nine recommendations, largely compliant for 25, and partially compliant for six. The country has not been rated as non-compliant for any recommendations. Moldova is expected to report back to MONEYVAL within one year on its progress.

By fLEXI tEAM